Conclusions

What has been offered here has been an approach to measuring that takes on board the public and private, the procedural and substantive, and the contractarian and democratic dimensions of insolvency. As already noted, acceptance that both the public and private dimensions of insolvency law are to be reflected in legitimation involves an acceptance, in turn, that legitimation may be derived from both the propensity of insolvency laws and decisions to further communitarian interests and the potential of such laws and decisions to protect pre-existing rights. The approach offered in this book – the explicit values approach – holds that an identifiable list of justifications has relevance in assessing the legitimacy of insolvency processes. The list is limited rather than openended (as was a problem with eclectic and communitarian visions) in so far as relevant legitimating arguments are organised under the four headings noted and arguments not falling under such headings are accordingly not to be treated as relevant for purposes of legitimation.

Such an approach, in turn, implies a particular approach to insolvency procedures. Dealing with explicit values in the above manner exposes the trade-offs between different values that have to be made in designing and applying insolvency processes. A variety of interests will accordingly have to enter consideration in a host of procedures. Such processes must respect the interests of, and the roles to be played in, insolvency by a range of parties affected by insolvency: not merely creditors (secured and unsecured) but employees, company directors, shareholders, suppliers, customers and other ‘commercial dependants’ of the company. The broad public interest must also enter deliberations as a valid concern and procedural inclusivity should be seen in access to information, broad inputs into key decisions and in holding parties to account. This is not to argue that customers, for instance, should have the same access to information and processes as creditors; it is to suggest that reasonable access for customers should not be denied in insolvency procedures on the grounds that customers have no recognisable interest in insolvency. The interests of affected or potentially affected parties should be procedurally recognised where the costs of doing so are reasonable. In some particular contexts, of course, rights of reasonable access may involve excessive costs through creating legal uncertainties that cannot be resolved and in those contexts restrictions will be appropriate. Such matters will be considered in the chapters that follow.

Does an explicit values approach supply the ‘fundamental or core principles’ that the 1994 Justice Report advocated as guides to the ‘true essence of the insolvency process’? It does not offer a cut-and-dried series

of primary principles to which others can be seen as subservient. The list of values set out here does, however, provide a core in the sense of a framework offering guidance in the development of insolvency rules and arrangements. It adds, for instance, to the arrangements of objectives set down by the Cork Committee by placing those objectives within a frame of concerns established according to the four particular rationales serving to justify insolvency rules. Those rationales provide a context for Cork’s objectives rather than leaving them as aims apparently plucked from the sky. The linking or cumulation of rationales also reminds us that objectives, such as are set out by Cork, do have to be weighed and traded against each other.

An explicit list of rationales, furthermore, offers a checklist to be dealt with by judges and decision-makers when dealing with insolvency issues. These actors may thus be invited not to reason with reference to a single or dominant vision of insolvency but to deal with points relevant to each of the four kinds of justificatory argument noted. Trade-offs between different ends and justifications are thus to be argued for in particular contexts and cannot be preordained according to set rules. Such argumentation should, however, be carried out explicitly and it is this structured transparency that will be the best guarantee of insolvency laws and processes that display a sense of direction.

For the purposes of this book, the rationales of efficiency, expertise, accountability and fairness provide benchmarks with which to evaluate both current and proposed arrangements. Such benchmarks can be applied not merely to substantive laws and informal rules but also to institutional structures and to those processes that are used to apply insolvency laws and rules on the ground. Throughout the chapters that follow, these benchmarks will be applied and, in particular contexts, attempts will be made to explain the balances and trade-offs that are involved between particular values or rationales. This book, however, sets out not merely to evaluate laws, processes and reforms. As indicated in the Introduction, it also aims to rethink perspectives. The ensuing chapters will, accordingly, apply the above benchmarks but will also consider whether improvements in corporate insolvency laws and processes have to come through new approaches and by adopting perspectives that challenge the underpinning assumptions of current corporate insolvency systems.